UK: The Future Of PPRS And Other Cost Restraints

A major attraction of the UK for the pharmaceutical industry is that it allows manufacturers relative pricing freedom and automatic reimbursement status for new products, comments a new report from Decision Resources. The best-known control feature influencing producers of branded prescription medicines in the UK is probably the Pharmaceutical Price Regulation Scheme, says the study, entitled the New PPRS and Other Pharmaceutical Cost-Containment Measures in the United Kingdom.

Author Donald Macarthur notes that the PPRS predates most methods of regulating national drugs bill growth which are currently used in other European countries, and that the Scheme was the first example in Europe of an agreement on drug pricing reached between industry (through the Association of the British Pharmaceutical Industry) and a government on the basis of mutual need, a principle that is now being adopted elsewhere.

Benefits Of The PPRS Only the UK controls the profitability of pharmaceutical companies by setting profit limits on their sales to the National Health Service, instead of fixing the prices or reimbursement rate of individual products. The PPRS provides - more flexibility in negotiations between health care product suppliers and the Department of health; - greater financial stability for the NHS, the drug sector as a whole, and for the individual companies; - price-setting based on products' comparative economic and clinical value; - avoidance of delays in the introduction of new products; and - reduction of bureaucracy.